ESI or Group Health Insurance for Employees

December 2, 2021

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What is the difference between ESI and group health insurance for employees?

Employees’ health is one of the key priorities of a company, whether it is 3 people brand or a 30,000+ team strength firm. The benefits of employee insurance while widespread, but the option remains limited. At present, when we talk about insuring employees health, there are only 2 choices that a company gets – Group Health Insurance and Employee State Insurance.

A lot of people are aware of Group Health Insurance for employees, but many don’t know that ESI is also another option for providing a financial medical backup to people. However, there are stark differences between ESI or group health insurance.

We will discuss what these concepts entail and what is the best option for employee benefits. But before that, it is important to know the two concepts inside out. Only when you have an understanding of the strengths and weakness of both the insurance options, you will be able to take the best step forward.

What does ESI mean? 

The ESI or Employee State Insurance is broadly a medical reimbursement program and administered and regulated by a social security and labor welfare organization known as ESIC that functions under the Ministry of Labor and Employment, Government of India. It is an autonomous and self-financing body that is strictly run based on the rules and regulations dictated by the Indian ESI Act of 1948.  

ESI medical benefits are applicable for the employees salaried under Rs. 21,000 per month. Under the scheme, both employee and employer have to pay the premium for the coverage that includes maternity, sickness, death due to employment, temporary or permanent disability, diseases contracted from a workplace, or any injury causing loss of earning capacity.  

Who is eligible for ESI features benefits?  

  • Any employee (and their dependents) who has a salary less than INR 15,000 may apply only if the employer is registered with ESIC and has been given a 17-digit ESI code post-registration.   
  • Any employee (and their dependents) who is employed in a work setup with more than 10 employees.  

What is the contribution necessary to be made towards ESI benefits?  

The employer contribution in ESI is that they pay 4.75% of the employee’s salary while the employee contributes 1.75% of their salary towards ESI premium.  

What are the documents needed for ESIC registration? 

For a business looking to register to ESIC, the following documents will be necessary –  

  • Registration certificate under Shops and Establishment Act 
  • Partnership deed for partnership firms  
  • List of workers with monthly compensation details 
  • PAN card and address proof of all the employees 
  • Employee attendance register 
  • List of directors, partners, and shareholders.  

What is Group Health Insurance? 

Group health insurance is a form of health insurance policy in which a huge number of health insurance policies are brought by companies for their employees. The benefits offered under GHI remain the same for all the individual employees and can be extended to the employees’ family members.  
While the primary aim for everything that is covered under group health insurance is providing protection to the employees, it also plays a massive role in retaining employees and helping in company’s growth.  

Things to know about group health insurance

Who is eligible for Group Health Insurance features benefits? 

  • The minimum number of employees in the company should be 20 employees 
  • The age range of the employees should be between 18 and 70 years 
  • The entities who are not eligible for group health insurance plans are – family businesses and sole entrepreneurs.  

What does Group Health Insurance entail? 

  • Employee health insurance companies usually cover medical benefits for self, spouse, parents, and children 
  • Some health insurance providers cover pre-existing illnesses  
  • GHI companies also offer cashless hospitalization within network hospital. 

What are the documents needed for Group Health Insurance? 

  • Employee data  
  • Name of the company and GSTIN number 

What are the advantages of Group Health Insurance for employees?  

Many large companies prefer corporate health insurance, which most likely includes group health insurance benefits for their employees as well. This is because:   

  • Group health insurance policy is cheaper per employee than individual health insurance plans   
  • All employees, including ones with existing diseases, get covered   
  • Plans can be customized based on the organization’s needs and finances   
  • Some plans offer a wider range of employee healthcare benefits like discounted medicines, teleconsultations etc. 

ESI or Group Health Insurance? 

ESI or Group health insurance

When we talk about the difference between ESI or Group Health Insurance, we usually compare the benefits and feature sets. Let us look at them in some detail.  

Sum assured cap: Under GHI, there is a definite sum assured for the expenses incurred for treatment, however you get the option to buy additional benefits by paying a certain group health insurance premium amount. In the case of ESI, there are no limits on sum assured.  

Cashless benefits: Both ESI or Group Health Insurance offers cashless medical treatment. However, since in ESI scheme, the coverage is limited to government-owned hospitals, the facility is very limited. In case of group health insurance, the list of network hospitals is comparatively very high, leading to a greater scope. So, when we talk about the difference in the contexts on the end of cashless benefits, it becomes more of a question around private vs public hospitalization. 

Death benefits: ESI gives a pension of up to 90% of the last drawn salary in case of permanent disability of death of an employee when they are on duty. In contrast to this, group health insurance doesn’t give any pension to the employee’s family.  

Critical illness: Critical illness is not covered in a majority of group health insurance plans until the employer pays extra premium to add in the facility. In case of ESIC, however, the treatment of critical illness is covered if the employee has covered the contribution period of 2 years.  

Maternity benefits: If a female employee is enrolled in ESI for a minimum of 70 days, she becomes eligible for a salary of 26 weeks. This feature is not applicable in case of GHI, but is offered by the corporates under the maternity benefit rule setup by the government of India 

Loss of job: A monthly allowance is paid to the employee by the ESI department for a maximum of 24 months if they incur involuntary loss of employment. This benefit is not offered by any group health insurance plan.  

As you can see from the above, there are stark differences between ESI and group insurance. However, the benefits that an employee gets from standalone GHI or even ESI is nowhere enough to take care of their comprehensive medical needs at the preventive stage.  What if we told you that there is something better than GHI? Read on to know more about Onsurity’s employee healthcare and wellness membership. 

The Right Step Forward: Employee Healthcare Benefits Over Just ESI And Group Healthcare Insurance  

If you want to know the advantages of Onsurity’s Employee Healthcare and Wellness membership, there are plenty. But for starters, some membership plans come with Group Health Insurance. In addition to all the benefits of GHI, these memberships are loaded with other benefits for the employees including free and discounted doctor teleconsultations, discounts of online medicine orders and health check-ups, and even offers on mental health and dental care. It not only covers regular healthcare but an employee’s overall wellness. 

The best part? All of it is accessible through a mobile app. As for the employer, the memberships are extremely affordable and are based on a monthly subscription. There is even a digital dashboard at the employer’s end where they can manage onboarding and exiting members. The list of benefits does not just end here. If the employee/member wants greater health benefits or add their family to the plan, they can upgrade their plan through personal purchase. 

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